Digital Video Market Analysis and Commentary

26 April 2016 - Futuresource Consulting has released the eleventh edition of "Living with Digital", its twice yearly consumer research programme, reporting on the shifts in consumers' entertainment content consumption, service usage and device ownership and interaction. In the latest survey, 2,000 interviews were conducted in each of the UK and USA and 1,500 in Germany & France. China, Japan, South Korea, Canada, Australia, Italy and Spain will also be covered in the next wave of research.

The survey provides detailed analysis on the trends in Subscription Video on Demand (SVoD), as uptake continues to rise across all countries. Both Netflix and Amazon Prime Video are increasingly prominent in the USA, UK and Germany and multiple service uptake is also high – with 82% and 69% of Amazon Prime Video users in the USA and UK respectively taking Netflix. Uptake of Netflix in France and Germany has increased significantly since the previous wave of research, although there is evidence that churn is high in France compared to the other surveyed countries.

The relationship between SVoD and Pay-TV is relatively complementary in most countries, as Pay-TV households are more likely to take SVoD services than free-to-air only households, although as SVoD becomes more established, this is less apparent. Indeed, in the USA, there is evidence to suggest that SVoD services are starting to cannibalise Pay-TV, but in France and Germany, Pay-TV penetration is over twice as high amongst Netflix households than non-Netflix households.

While SVoD growth continues to impress, the shift to digital video purchasing remains relatively steady. "Despite a decline in DVD and Blu-ray purchasing, the number of consumers buying transactional digital video appears to be slowing, largely driven by a decline in digital renters. However, those purchasing Electronic Sell-Through (EST) movies and TV shows are marginally increasing," commented David Sidebottom, Principal Analyst at Futuresource Consulting. "Few video buyers are just buying Electronic Sell-Through (EST), suggesting a steady transition to digital ownership," Sidebottom adds.

Increased living room connectivity continues to help drive this overall video viewing. Connected/Smart TV connectivity rates have improved since the last wave, with 85% of US & UK smart TV owners now connecting their sets. Across all countries, 71% of connected sets are being used once a week or more. Video continues to drive overall usage, although free viewing has fallen back as paid-for video, particularly SVoD, increases in importance on connected TVs.

Connected TV connectivity rates have grown despite the proliferation of Digital Media Adaptors (DMAs, or streaming boxes/sticks) with growth particularly notable in Europe; in Germany 16% of respondents now have a DMA. Across all countries, multiple device ownership is important, 27% of consumers with a DMA now have more than one. Regular usage is marginally higher than for connected TVs with 84% of owners using them at least once a week.

Despite this growing choice in video viewing options, live TV remains the most frequently used platform for accessing TV/video across all countries, although after this, the second and third most frequently watched format remains diverse by country. The number two platform in France is Catch-Up TV, Germany is DVD/Blu-ray, UK is DVR Time-shift and USA being SVoD, suggesting strong local behavioural characteristics.

Notes:

Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com

Authorised use of information All information provided by Futuresource in any form is proprietary information that belongs to Futuresource and is protected by UK and international copyright law. Except as outlined below, direct or indirect reproduction of information, in whole or in part and by any means, is prohibited without the express written consent of Futuresource.

Members of the press may use a press release in its entirety or take segments from it as necessary; they may also use a graph, a slide, or a section of a supplied research report less than fifty words long, provided all text is identified as "Source: Futuresource Consulting" and all graphics are credited with "Futuresource Consulting, copyright 2019".